Credit Control for Small Businesses, Getting It Right
It will be obvious to any business owner that the answer to this lies in striking a balance somewhere between the two extremes of being overly aggressive or too passive in your credit control methods, some companies I have had personal dealings with have sent me demanding reminders for payment even before the payment deadline has been reached which just makes me dislike that company. the result of their aggressive approach is that I have withheld payment for as long as possible in a misguided attempt to annoy them back, at the same time I have had invoices to pay and put them aside as they were not due and have let them go overdue until another reminder was sent. Aggression in credit control should be controlled if you want to keep your clients as customers, however a certain level of aggressiveness is required if you are to maintain cash flow and stay in business, this is the credit control conundrum.
The remedy.
No one answer will be a panacea for all businesses of all sizes, each business will need a remedy to suit and presented here are the possible solutions to maintain your profitability without alienating your customer base.
Outsourcing
Credit control can be successfully outsourced and may seem attractive to some small businesses with the benefits that outsourcing brings, while this is a decent remedy for larger organisations I am not a proponent of advising it as a solution for small businesses who in my experience tend to have a much more personal relationship with their clients and if the customer has an issue buy kamagra they want to deal with it personally.
Another possible solution is to use credit control software which is a great remedy for a small business, the software will not forget accounts, will not send anything other than what it is programmed to do and the content of all communication is matched to your relationships. Control is maintained Buy Generic Levitra Professional Online without Prescription in house and should a client have particular issues it is possible for the company to either over ride the software or input the data to allow the software to cope with the issue. You may be thinking that software sounds mighty expensive and you are right, however particularly buy levitra cheap with credit control there are some extremely reasonably priced solutions available that could amoxil suit almost any size of company, simply shop around and you will find something that works for you and your accountant, all you need to be wary of is makin certain that any software cheap amoxil you invest in is scaleable, your company will grow and you don’t want to have to change the sytems infrastructure you are using because your current solution can not grow with you.
3rd Party Invoicing
Invoice factoring is a financial arrangement between yourself and a financial organisation (the factor) whereby you basically sell your accounts receivable to the factor for an immediate payment usually a percentage of the total accounts due. For example a client has purchased services from you for $5000 and they are billed immediately with payment terms of 60 days, you need the cash flow so instead of harassing your client you sell the account to the factor who pays you the account less a percentage in this case, 10%, so you actually receive an immediate payment of $4500. Once invoiced the account is no longer your worry, the factor deals with everything including chasing, reminders and non payment.. A perfect solution for those companies that need to give long payment terms but can not suffer the cash flow issues that 90 day payment terms can cause, although losing a percentage is not ideal it does remove any additional costs in chasing payment and potential non payment.
Each remedy has merits and each business will get something from one or another, my own favoured moneygram method is using credit control software as it allows me to keep control of the whole process but eliminates a whole ton of chances for me to get it wrong. Whatever you decide please give a lot of thought to your credit control processes, face up to it, turning over millions is no use unless you are being paid, take control of your credit control before it takes control of you.
